Labour?s strike threat over diverted pension and NSITF funds gained fresh momentum yesterday as the Nigeria Social Insurance Trust Fund, NSITF, admitted that 50 percent of workers? contributions under the Employees? Compensation Scheme, ECS, had been deducted by the Federal Ministry of Finance.

The admission came just days after the Nigeria Labour Congress, NLC, issued a seven-day ultimatum to the Federal Government to refund the allegedly diverted workers? funds and immediately constitute the Governing Board of the National Pension Commission, PenCom, or face a nationwide industrial action.

Recall that on Thursday, the NLC had warned that failure to refund the deductions and inaugurate the PenCom board within the ultimatum period would compel workers to down tools across the country.

This came as the Nigeria Employers? Consultative Association, NECA, has given a tacit endorsement to the seven-day ultimatum issued by the NLC.

Confirmation of deduction

In a letter dated August 16, 2025, addressed to NLC President, Joe Ajaero, NSITF Managing Director/Chief Executive, Mr. Oluwaseun Faleye, confirmed that the deductions were carried out based on a Ministry of Finance circular.

According to him: ?You will recall that the Federal Ministry of Finance circular (Ref: FMFCME/OTHERS/IGR/CFR/21/2021) dated 28th December 2023 introduced a policy of automatic deduction of 50% from the internally generated revenue of all Federal Government-owned enterprises.

?The Fund has consistently engaged formally with the Federal Ministry of Finance, the Budget Office of the Federation, the Office of the Accountant General of the Federation, and the Fiscal Responsibility Commission that the said circular overlooks the peculiarities of the Employees? Compensation Act 2010. Within the context of our mandate and obligations to subscribers under the law, those collections are to be treated as liabilities rather than revenues.?

Some deductions reversed

The NSITF boss revealed that following engagements with the economic management team, the Accountant-General of the Federation upheld NSITF?s position. ?The Office of the Accountant General of the Federation by its letter of March 25, 2024, upheld our argument and noted that it will exclude employers? contributions from the automatic deductions,? Faleye stated.

He disclosed that some deductions had already been reversed, while reconciliation was still ongoing between NSITF and the Office of the Accountant-General of the Federation.

However, Faleye noted that deductions were still being made from proceeds of the Fund?s investments.

?We note that deductions are still being made in respect of proceeds of our investment, without distinguishing between invested capital and return on investment. We continue to engage with the relevant offices to resolve these issues,? he said.

Finance Ministry, Budget Office assure Labour

Faleye further disclosed that at a meeting held on Monday, August 11, 2025, the Director-General of the Budget Office reaffirmed that no further deductions would be made. ?The DG gave his commitment to ensuring that no further deductions are made from our funds under any guise. The Minister of Finance and Coordinating Minister of the Economy has also expressed similar views on the matter. I implore you (NLC) to bear with us as we engage with the relevant offices to resolve the issue and claw back any deductions that may remain outstanding.?

Moves to amend NSITF, ECA Acts

The NSITF Managing Director dismissed allegations that the Fund was pushing for amendments to weaken workers? rights.

He said ?We are not actively pursuing the amendment of the NSIT and ECA Acts to undermine workers? rights and control over their contributions as alleged. Instead, we have actively engaged the National Assembly on issues that will enhance the sustainability of the Fund to better serve Nigerian workers.?

He explained that NSITF only made recommendations during retreats with the National Assembly and other stakeholders, including a proposal for stronger powers to enforce compliance against defaulting employers.

He added ?In our view, this will better enhance and protect workers? rights rather than undermine them.?

?Everyone pushed to the Wall? ? NECA

Speaking to Vanguard, the Director-General of the Nigeria Employers? Consultative Association, NECA, Adewale-Smatt Oyerinde, threw his weight behind Labour?s demands. ?Everyone has been pushed to the wall. Unfortunately, employers cannot go on strike, but we are deeply invested in ensuring that the right thing is done?simply by respecting the Acts.?

According to him: ?Our position has been clear from the outset: when agencies are created, they are products of legislation?Acts of the National Assembly. Some agencies are unique because they are not just federal government agencies; they also belong to social partners.

?There are International Labour Organisation, ILO, conventions that back the creation of these agencies, ensuring they operate within a defined scope.

?Proper corporate governance is also embedded in these Acts. Our stance is that we cannot selectively implement parts of these Acts while deliberately or inadvertently violating others. This applies to both the PenCom and NSITF.

?In PenCom, the two most critical stakeholders are employers and workers. Employers contribute 10% of payroll on behalf of workers, while workers contribute 8% from their earnings. There is no more important stakeholder in PenCom than these two groups.

?Our long-standing call has been for the government to promptly constitute the PenCom board. This is because the funds managed by PenCom are other people?s money, and proper oversight is essential. We have been making this appeal for many years.

?The same applies to NSITF. Social insurance is an ILO concept, supported by conventions and recommendations that safeguard the role of social partners. NSITF does not belong solely to the federal government; it belongs to social partners. Employers contribute funds to protect workers in case of injury, making us critical stakeholders in that fund.

?On the matter of siphoning funds, we have heard of a government directive that all payments and revenue collections should go into the Federation Account. The truth is that PenCom is not a revenue-generating agency?its funds are strictly for paying workers after retirement, either through programmed withdrawals or annuities.

?Similarly, NSITF funds are not government revenue but are meant to cover costs from workplace injuries, which are unpredictable and cannot be budgeted for.

?The Industrial Training Fund, ITF, is also not a revenue-generating agency. Employers contribute to it, and at least 50 percent of those contributions are reimbursed to employers who meet training obligations.

?Despite this, the federal government recently issued a circular directing that a percentage of these agencies? supposed ?income? be moved into the Federation Account. While this might be applicable to some agencies, it should not apply to PenCom, NSITF, and ITF because their funds are for specific social partner purposes?not revenue. ?When it comes to corporate governance, nothing is more important than having a board in place. The NSITF needs a management board; PenCom needs a governing board. While most other boards have been inaugurated?some already functioning despite operational challenges?these two agencies are still without them.

?For PenCom, which safeguards the contributions of both workers and employers, this is critical. While the Director-General of PenCom is doing commendable work, a board is still needed to provide oversight.?

Tinubu appoints Agbaje PenCom Chairman

Meanwhile, President Bola Tinubu has appointed Mr. Opeyemi Agbaje as Chairman of the Board of PenCom, in what observers say is a step toward meeting the demands of NLC and NECA.

According to sources, Agbaje, an economic policy expert and public commentator, previously served two terms on the board of the Lagos State Security Trust Fund, LSSTF, between 2011 and August 2019. (Vanguard)

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